1 Apple vs. Qualcomm2 The role of FTC
In the filing, Qualcomm asks that four of Apple’s suppliers pay licensing fees for using the chip manufacturer’s intellectual properties. Qualcomm executive vice president and general counsel, Don Rosenberg, says in a statement that “[Qualcomm seeks] an order that the manufacturers comply with their obligations to pay for the intellectual property they continue to use for the benefit of Apple.” Said Apple suppliers are Foxconn, Pegatron, Wistron, and Compal. Qualcomm began suing these four companies last week, for breach of contract. According to Qualcomm, Apple instructed these companies not to pay royalties for devices they created using Qualcomm technology.
Apple vs. Qualcomm
To put things into perspective, the heated court battle between the two companies begun back in January. Apple sued Qualcomm over unfair licensing terms for its processor technology. Of course, Qualcomm responded immediately, with Don Rosenberg calling Apple’s allegations “baseless.” A few months later, in April, Apple stopped paying royalties to suppliers for phone patents owned by Qualcomm. As a result, Pegatron, Wistron, Compal, and Foxconn, stopped paying royalties to Qualcomm for manufacturing iPhone and iPad devices with Qualcomm’s chips. The renown chip manufacturer then sued these four companies and has now followed up by demanding that Apple starts paying for phone patents.
The role of FTC
Besides Qualcomm and Apple, another key “player” in this heated court fight is the U.S. Federal Trade Commission (FTC). The FTC filed a lawsuit against Qualcomm back in January, for “anticompetitive” behavior. Indeed, the commission claimed that Qualcomm has used its winning market position as leverage against manufacturers and to push out competitors. The filing stated that the company has pushed “onerous” supply and licensing demands on manufacturers. However, one month after the filing, the head of the FTC changed with Republican Commissioner Maureen Ohlhausen taking over from Democratic Chairwoman Edith Ramirez. In terms of the Qualcomm case, Ramirez and Democrat Terrell McSweeny voted to file the complaint. Ohlhausen was against the action. Indeed, she said the filing was based on “flawed legal theory … that lacks economic and evidentiary support.”
